GST revamp, global tailwinds signal firm start for Indian equities

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The Gift Nifty 50 index signaled a firm opening for Indian equities on Thursday, buoyed by positive global cues and the Goods and Services Tax (GST) Council’s sweeping rate rationalisation.

Trading around Rs 24,974 — a premium of nearly 161 points over the Nifty futures’ previous close — the Gift Nifty pointed to a robust start for the benchmark index.

On Wednesday, the Sensex was up 409.83 points, or 0.51 percent, at 80,567.71, and the Nifty was up 135.45 points, or 0.55 percent, at 24,715.05. About 2,385 shares advanced, 1,356 shares declined, and 123 shares were unchanged.

Experts said the index climbed above the 100-day EMA (24,630) and the midline of the Bollinger Bands (close to 24,700), hitting the 20-day EMA intraday. Hence, if the index sustains above the 24,700–24,750 zone in the upcoming sessions, 24,800 will act as the immediate resistance. A breakout above this could open the way toward the 25,000 mark. On the downside, immediate support is placed at 24,600, followed by key support at 24,500, according to experts.

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The Bank Nifty also rebounded sharply, rising 407 points, or 0.76 percent, to close at 54,068, but remained rangebound for the fourth consecutive session. The index consistently faced resistance in the 54,100–54,200 zone and found support at the upward-sloping trendline and the 200-day EMA (53,582), though it remained below its 20-, 50-, and 100-day EMAs. “Looking ahead, the 53,600–53,500 zone will act as crucial support. A sustained move below 53,500 could trigger a sharper decline toward 53,000, followed by 52,500 in the short term,” said Sudeep Shah, Head – Technical Research and Derivatives at SBI Securities. On the upside, he added, the 54,300–54,400 zone will serve as key resistance.

Analysts expect consumption-linked sectors to benefit significantly from the GST rejig. With slabs streamlined to five percent and 18 percent, and the previous 12 percent and 28 percent rates scrapped, discretionary, durable, and staple stocks are likely to outperform.

Auto shares may see traction as compensation cess on premium vehicles is withdrawn, marginally improving affordability. Fast-moving consumer goods are set to be in the spotlight as products like toothpaste, soap, and packaged foods shift to a five percent rate from the earlier 12 to 18 percent band, translating into an estimated six to 11 percent price reduction.

Industry experts see the move as a clear tailwind for FMCG demand, with food and home-personal care players such as Britannia and Colgate poised to gain the most. Quick-service restaurants and alcoholic beverages could also benefit from lower input levies.

Insurance counters are expected to draw interest after the GST Council granted exemptions on all individual life, health, and savings policies, while third-party cover for goods vehicles was pared to five percent from 12 percent — a development seen as consumer-friendly, though the elasticity impact is yet to be gauged, experts added.

Globally, Asian equities advanced on Thursday as dovish signals from Federal Reserve officials calmed investor anxiety amid bond-market volatility. MSCI’s broad Asia-Pacific ex-Japan index climbed 0.5 percent, Australian shares rose 0.7 percent, and Japan’s Nikkei 225 opened 1.2 percent higher.

Wall Street closed mostly positive overnight, with the S&P 500 up 0.51 percent at 6,448.26 and the Nasdaq Composite adding 1.03 percent to 21,497.73, powered by technology stocks after a favorable court ruling in an Alphabet antitrust case. The Dow Jones Industrial Average slipped marginally by 24.58 points to 45,271.23.